question category: IVA

IVA or Bankruptcy and school fees
Submitted on: 8th Jul 2009 by Non-Member | Total Answers: 2

My child is being educated at a private school and has been since aged 5 (child is 9 now) and we have been paying school fees, I have been unemployed for 7 months and have now found a job starting in September, however I will likely need to do an IVA or possibly even bankruptcy in the next few months. In either of these circumstances am I likely to be allowed to continue paying school fees from my newly found income / job? Or will the provisions of an IVA or Bankruptcy deem these to be a luxury expense?

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Re: IVA or Bankruptcy and school fees

I am pretty sure private school fees would be seen as a luxury expense. Given the fact that you have found employment, write to your creditors explaining where you are and how you would propose to re-start paying the debt off from September onwards. Ask them to stop any interest and charges as well. They won't want you to go bankrupt or even start an IVA if they can help it. If you offer them a pro-rata payment of what you can afford to repay each month, so the creditor you owe most get the most in a pro-rata way, you may be OK. Do this all in writing.

Submitted on: 8th Jul 2009 by TA Member

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Re: IVA or Bankruptcy and school fees

Its extremely unlikely you'll be able to continue paying school fees unless you can put a very persuasive case to the Official Receiver or insolvency practitioner. If there is only one year to go before secondary school it might be possible. Speak to some local IPs about your case, most of them will give an opinion or free.

If you include your school fees in an IVA proposal you are in effect asking your creditors to fund your children's education!

This question was answered by Debt Advice Foundation, an independent UK debt advice charity. If you're considering entering into an IVA, Debt Advice Foundation provides a free, confidential helpline and can advise you on whether you qualify. Click here to find out more.
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Submitted on: 9th Jul 2009 by Darren Member

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